delete AMENDMENT TO THE 1977 ACT
The Rent Acts (Maximum Fair Rent) Order 1999 establishes a formula to cap registered rents under the Rent Act 1977. It limits rent increases to a maximum fair rent calculated using the Retail Price Index, with a 7.5% cap for first registrations after the Order and 5% for subsequent ones, rounded to the nearest 50 pence. Exceptions exist for dwellings improved by landlords where rents rise by at least 15%.
This is rent control legislation that distorts the housing market by capping rents below equilibrium. It reduces incentives for landlords to invest in property maintenance and new housing supply, creates artificial shortages by favouring sitting tenants over newcomers, and perpetuates a legacy regulatory framework from 1977 that inflates housing costs for future generations. The arbitrary 15% improvement threshold and rounded increment system add complexity without addressing underlying market failures. As Friedman recognized, price controls ultimately harm those they intend to protect by reducing supply and creating perverse incentives.